For four consecutive years, China has become the world's largest auto market and continues to expand. How to better get closer to the needs of local consumers? For multinational parts and components companies, only the continuous upgrading of localization will tilt China's production, procurement, R&D and other centers to China in order to gain more market share in the Chinese market.
As the importance of the regional market in China continues to escalate, some large multinational corporations have emerged to match high-level restructuring. Continental AG, the German automotive parts supplier, announced in August this year that its global executive director, Kang Ruifan, has assumed the position of President of the New China Region. The President of China directly served on the board of directors of the Group Headquarters. This is the first multinational parts and components company to convey the message that China's status has risen to the Group's strategy.
Not only the mainland companies that use the Chinese market as a strategic market, multinational component companies such as Bosch Group and Delphi have been deeply cultivating the Chinese market for many years. The sweetness of localization has prompted the headquarters of these multinational corporations to continue to make greater investments in the Chinese market to continue to expand. The Chinese market gains a growing share. "The Schaeffler Group's investment growth in Greater China exceeds the Schaeffler Group's sales growth in Greater China. The Group's headquarters has also formulated local talents, technology research and development, etc. for the sustainable growth of China's business. Plan.†Zhang Yilin, deputy general manager of Schaeffler Greater China, told reporters.
In-depth western investment
“At present, there are 19 mainland production bases in China and 19 sales offices. With the new R&D centers and factories put into operation, our employees in China will reach 25,000. Currently, our factories are mainly located in East China and North China. However, in the future, we must closely follow the trend of the western migration of the auto industry and turn our attention to the central and western regions to increase investment in the western region. Kang Ruifan told this reporter.
With the enhancement of China's western development strategy and the construction of new OEMs in the western regions such as FAW-Volkswagen, Geely Automobile and Volvo Cars in Chengdu, many auto parts manufacturers have also accelerated investment in the western region.
Chen Yudong, president of Bosch (China) Investment Co., Ltd., previously stated that by 2015, Bosch will invest RMB 3 billion to RMB 4 billion annually in China. Investment-focused areas will still be automotive technology, and the key investment areas will be in the central and western regions.
In August this year, the second production base of Bosch's Chassis Control System Division was put into operation in Chengdu. The new plant will produce ABS/ESP and wheel speed sensors to meet the needs of local markets for safety technology. The new plant is located in the Chengdu Economic and Technological Development Zone. The investment will reach 880 million yuan. At present, the first phase of the project has been completed and the investment amount is 287 million yuan. The wheel speed sensor will be put into production at the new plant in 2013, and the ABS and electronic stability program ESP of the anti-lock brake system will also be put into production in 2014.
“The opening of the Chengdu plant enabled the Bosch Group to respond more quickly to the needs of the western market and provide better services to local customers. This also demonstrates our confidence in the future development of the Chinese automotive industry,†said Chen Yudong.
Like the Bosch Group, Delphi, a US auto parts company, also invested in an electronic wiring harness plant in Chongqing during a similar period. O'Neill, president of Delphi Global, said that Delphi has been investing in the Chinese market. “In 2012, Delphi China’s sales revenue was 1.9 billion U.S. dollars. By 2016, it will double its sales revenue. By 2020, it will double that of 2016. To match the increase in sales revenue, we plan to invest in three factories in China. It has been opened and Delphi is preparing to build 6 factories in China in the next three years, said O'Neill.
The collective investment expansion period also includes multinational auto parts companies such as Valeo and TRW. Last year, Valeo's sales in China exceeded 10 billion yuan, accounting for 10% of the group's sales. The company expects that number to double in 2015, when China will become its largest overseas market. TRW plans to invest more than US$200 million in the Chinese market this year, exceeding TRW’s investment in any country in the world.
Transfer to R&D center
However, as China becomes the largest auto market, the role of the Chinese auto market is also shifting from the manufacturing center to the R&D center.
“The Chinese auto market has ended the period of high-speed growth and entered a stage of low-speed and steady growth, and there are also major changes in the market during this same period. The volatility of auto production and sales directly affects the shift of major companies’ global investment priorities. China has not only become a world The center of automobile manufacturing, and shifting to the R&D center, the Chinese automobile industry is undergoing a process of manufacturing from China to China. This change has not been seen in the history of the automobile industry for more than 100 years. This change is not based on human will. This is the result of the integration of the world economy and the adjustment of the global economic structure.†Wang Xia, president of the China Council for the Promotion of International Trade of the Automobile Industry, stated at the Fourth Global Automobile Forum.
Wang Xia therefore said that how to think about the auto industry from the perspective of global trade, how to consider the changes in the industrial structure from the perspective of global economic integration, how Chinese companies identify the status in this major change, how multinational companies can better To integrate into the Chinese market, these are all issues that lie ahead and need answers.
The senior McKinsey global director and chairman of Asia, Ogaden, believes that the multinational company's gradual shift toward Asian tilt is a new strategic adjustment for multinational companies. More and more multinational corporations have shifted their business headquarters to Asia. This shift is essentially different. In the past, some automakers invested in factories in China and India in order to gain sales rights or consider cost-effectiveness. Now is voluntary behavior, highlighting Asia’s position and potential in its global leadership, culture, and talent pool.
Indeed, the localized talents and role of the Chinese auto market are increasingly important in the decision-making of multinational auto parts companies. Zhang Yilin deeply understands that now with the importance of the Chinese market and the improvement of Chinese engineers' technology, the importance of China’s top executives in the company’s global top level has been strengthened, and it’s now the headquarters of the company’s headquarters that is consciously accepting that Chinese people can Manage the local market well.
“R&D is the most important link in the process of localization of multinational companies. Localization includes several stages, first of all, the localization of sales and production, followed by the localization of procurement, and the most important is the localization of product development technologies. The localization of technology includes the localization of progressive technologies and the localization of applied technologies. The final step is the localization of some breakthrough technologies in the future, said Chen Xi, Chief Technology Officer of Asia Pacific and Greater China of Schaeffler.
Chen Hao said that now for the localization of the Chinese market, Schaeffler's global headquarters has been able to decentralize its decision-making power. For example, the approving rights for drawings for some applied technologies have already been delegated to the Chinese market. If the Chinese branch needs local production, it is no longer necessary. Need headquarters approval to produce.
“I would like to point out that using local talent is a big problem for most multinational corporations. At present, some companies have implemented explicit local talent incentives—for example, requiring expatriates to cultivate local talent as their successor. "Ogoldon said.
In terms of training local talents, the Bosch Group has outstanding performance in multinational auto parts companies. In order to further improve local decision-making capabilities, the Bosch Group has appointed a number of Chinese top management companies for automotive, energy and building technology business units in China. personnel. Chen Yudong is also one of the rarest multinational companies to serve as senior Chinese. At the same time, more than half of the Bosch Group’s major business units in China are headed by the Chinese.
“Chinese people understand the Chinese market and Chinese culture more easily.†This is the idea of ​​Bosch Group executives, and the Bosch Group has also strengthened its research and development capabilities in the Chinese market. It is understood that in 2012 Bosch China registered 126 local patents, an increase of 75% over 2011. As of the beginning of 2013, Bosch China employees increased by 11% to 34,000, of which R&D personnel increased by 16% to 3200.
It is precisely the upgrading of the localization market that the Bosch Group has received good feedback from the rapid expansion of the Chinese auto market. In April of this year, the Bosch Group announced that its consolidated sales in China reached 41.7 billion yuan in 2012, which is Bosch's performance in the tenth year since it entered the Chinese market. Chen Yudong stated: "Bosch has always paid attention to the long-term layout in the process of continuously promoting localization. Innovation and talent are the main drivers of Bosch's long-term development in China."
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